South Sudan says its soldiers have retained control of a key town in the oil-producing border region of Heglig despite clashes with Sudanese forces.
Philip Aguer, a spokesman for South Sudan's military, known as the SPLA, said on Saturday there had been overnight clashes in Kelet, a village about 40kms from Heglig town.
"Yesterday, there were clashes between their patrols and SPLA. ... SPLA has destroyed two tanks belonging to the SAF," Colonel Aguer said.
South Sudanese forces seized control of Heglig town earlier in the week during the worst fighting in the region since the South seceded from Khartoum's rule last year.
South Sudan's information minister also said Sudanese efforts to regain Heglig had been repelled.
"They tried to attack our positions north of Heglig last night but it was contained," said Barnaba Marial Benjamin. "Heglig is (still) under our control."
Aguer said Sudan's air force bombed the border areas of Jau and Panakuach, in northern South Sudan's Unity State, on Saturday, as well as Heglig, the main producer of Khartoum's oil.
No information was available early on Saturday on the positions of the two armies.
A Unity State government spokesperson, reached by telephone in the state capital Bentiu, confirmed the aerial bombings near the border.
"The areas in the north of Unity State are still subject to Antonovs (planes)," said the spokesperson, Gideon Gatfan. "We don't have the updates yet between Heglig and Kelet, but all those areas they are subjected to bombing."
On Friday, Al Jazeera's Nazanine Moshiri, reporting from Juba, the capital of South Sudan, said a spokesperson there had told her Sudanese forces were about 30kms from Heglig and that South Sudanese would defend themselves if they attempted to take back the town.
"This could end up becoming a full-blown conflict," our correspondent said.
World powers and the United Nations have urged restraint after the latest round of heavy fighting that broke out on Tuesday.
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The African Union denounced the South's occupation of Heglig as illegal and urged the two sides to avert a "disastrous" war.
Oil production halted
Fighting in Heglig has halted oil production amounting to about half of Sudan's 115,000 barrel-a-day output and damaged facilities, officials say.
Speaking in Nairobi, Pagan Amum, South Sudan's lead negotiator at talks to resolve the dispute with Sudan, said his country was ready to withdraw under a UN-mediated plan.
"On the ground, we are ready to withdraw from Heglig as a contested area ... provided that the United Nations deploy a UN force in these contested areas and the UN also establish a monitoring mechanism to monitor the implementation of the cessation of hostilities agreement," he told reporters.
The south seceded from Khartoum's rule last year but the two sides have not agreed on issues including the position of the border, the division of the national debt and the status of citizens in each other's territory.
Amum said there were seven disputed areas and called for international arbitration to settle the issues.
Blow to the economy
The loss of Heglig's oil output is another blow to Sudan's economy, which is already struggling with rising food prices and a currency depreciating on the black market.
"Resumption of oil in that area will only come when the UN deploy their forces between the two countries and in the disputed areas and when the two countries reach agreement to resume oil production," Amum said.
Landlocked South Sudan shut down its own 350,000 barrel-per-day oil output in January in a row over how much it should pay to export crude via pipelines and facilities in Sudan.
Oil accounted for about 98 per cent of the new nation's state revenues and officials have been scrambling for ways to make up for the loss.
In Juba, about 200 people demonstrated at a government-organised protest against Sudan and in support of the occupation of Heglig, holding banners which read: "The people want the army to be in Heglig" and "They bomb children and women".